ALIEN MANUAL - TAX RULES AND REGULATIONS, SECTION D7

D7.0 YEAR END TAX DOCUMENTS

The Internal Revenue requires that withholding agents provide a wage statement to alien individuals who have received payment. The reporting statement for employees is a W-2 and in cases of a tax treaty, also a 1042S form. All other payments to nonresidents are reported on a 1042S.

The State of California requires that withholding agents provide a statement to alien individuals, also. Employees receive a W-2. Nonresident (non-employees) receive a 592B for payments $1,500 and over.

D7.1 W-2 Form

This form reports the federal and state taxable earnings and the withholdings from these earnings for employees. Employees that have claimed exemption from federal taxes due to a tax treaty will receive a W-2 reflecting federal earnings/withholding not covered under the tax treaty and state earnings and withholdings. The federal information will be reported on a 1042S.

Questions about the W-2 form should be directed to Payroll Services Tax Accountant.  A sample UCLA W-2 form can be found in the PPS Overview Manual, Section D2.2.

D7.2 1042S - Foreign Person’s U.S. Source Income Subject to Withholding 

Form 1042-S Foreign Person’s U.S. Source Income Subject to Withholding 1999 OMB No. 1545-0096 Department of the Treasury Internal Revenue Service For Paperwork Reduction Act Notice, see page 1 of the separate instructions for Form 1042-S Copy A for Internal Revenue Service

Line (a) Income code (b) Gross income paid (c) Withholding allowances (for income code 15 or 16 only) (d) Net income  (column (b) minus column (c)) (e) Tax rate (%) (f) Exemption code (g) U.S. Federal tax withheld (net of any tax released) (h) Country code 1 15 11,276.00   11,276.00   2   FR 2 15 750.00 505.79 244.21 14 0 34.19 FR 3 Total 12,026.00 505.79 11,520.21     34.19

4 Recipient code                                                        01 9 WITHHOLDING AGENT’S name and address (including ZIP code) UCLA PAYROLL SERVICES 10920 WILSHIRE BLVD - 6TH FLOOR, RM 620 LOS ANGELES CA 90024-6502 5 Recipient’s U.S. taxpayer    identification number, if any                   123-45-6789 6 Account number (optional) 7 RECIPIENT’S name (first name, initial, and last name), street address, city or town, province or state, and country (including postal code) JULIA ROBERTS 3222 BEVERLY DRIVE BEVERLY HILLS CA 90210 10 Withholding agent’s taxpayer identification number (TIN) 95-6006143 11 PAYER’S name and TIN (if different from withholding agent’s) 12 State income tax withheld 8 Recipient’s country of residence for tax purposes FRANCE 13 Payer’s state tax number 935-0510-5 14 Name of state CA

VOID CORRECTED Cat No. 11386R Form 1042-S (1977)

Form 1042S is used to report all non-employee payments made to nonresident aliens and payments made to nonresident employees who claim exemption from federal income taxes due to a tax treaty.

A description of the fields follow.

1. Income Code - represents the type of income reported. The types currently used at UCLA:

12  - Royalties
15  - Scholarship or fellowship grant
16  - Compensation for independent personal services
18  - Compensation
19  - Student Employment

2. Gross Income Paid - reportable gross amount paid

3. Withholding Allowance - amount of allowance for individuals claiming a personal withholding allowance on the W-4. Amounts entered are only for income 15 and 16.

4. Net Income - the difference between Gross Income Paid and the Withholding Allowance. Only used when an amount appears in column C.

5. Tax Rate - the rate applicable for the type of income. The rates at UCLA are:

0 - amount is exempt from tax withholding
14 - nonresident with an F or J visa and has a scholarship
30 - all other nonresident

6. Exemption Code - the reason for the tax rate. The codes used at UCLA

0 - tax rate is above zero
2 - exempt under IRS code
3 - Income is not from a US source
4 - Exempt under a tax treaty

7. Federal Tax Withheld - amount of tax withholdings

8. Country Code - Corresponding code of the individual’s country of residence

9. Receipt Code - type of entity receiving payment. UCLA currently payments 01 - Individuals

10. Recipient’s U.S. Tax Payer Identification Number - this is the social security number or ITIN number

11. Recipient’s Name and Mailing address - Name and address of the individual who received payment

12. Recipient’s Country of Residence - Name of the individual’s country or residence.

13. Withholding Agent’s Name and Address - UCLA and Payroll Services address

14. Withholding Agent’s Taxpayer Identification number - the IRS number assigned to UCLA.

15. State Income Tax Withheld - the amount of state tax withholdings. The field is blank for employees. The W2 reports this information.

16. Payer’s State Tax number - the Ca state number assigned to UCLA.

17. Name of State - state location of withholding agent

D7.3 592B - Nonresident Withholding Tax Statement 

The 592-B form is used to report tax withheld on payments of California source income to nonresident individuals. They are not employees. A description of the fields are listed below:

1. Tax Year - The tax year in which the payment was received and taxed

2. Recipient - Name and address of the individual who received payment

3. Withholding Agent - UCLA and Payroll Services address

4. Social Security no. - this is the social security number or ITIN number

5. Social Security no. - the CA State number assigned to UCLA

6. Type of income subject to withholding - At UCLA, the types of income are independent contractor, royalties, and other - scholarship/fellowship

7. Total amount subject to withholding - Taxable gross received

8. Total California tax withheld - Tax withholdings

 D7.4 1099 - Miscellaneous Income Form

9595  VOID  CORRECTED
PAYER’S name, street, address, city, state, and ZIP code UCLA 10920 Wilshire Blvd 5th Floor Los Angeles CA 90024-6502			1 Rents $	OMB No. 1545-0115 1999 Form 1099-MISC	Copy A For Internal Revenue Service Center File with Form 1096 For Paperwork Reduction Act Notice and instructions for completing this form, see Instructions for Forms 1099, 1098, 5498, and W-2G.
			2 Royalties $
			3 Other Income $
PAYER’S Federal identification number 95-6006143	RECIPIENTS identification number 123-45-6789		4 Federal income tax withheld $	5 Fishing boat proceeds $
RECIPIENT’S name Melissa Tormei ABC Builders			6 Medical & health care payments $	7 Nonemployee compensation $ 5500.00
			8 Substitute payments in lieu of dividends or interest $	9 Payer made direct sales of $5,000 or more of consumer products to a buyer (recipient) for resale
Street address (including apt. no.) 456 Flower Lane
City, state and ZIP code Los Angeles CA 90039			10 Crop insurance proceeds $	11 State income tax withheld
Account number (optional)		2nd TIN Not	12 State/Payer’s state number
Form 1099-MISC Cat. No. 14425J Department of the Treasury - Internal Revenue Service

The 1099 form is used to report income for individuals who have been paid at least $600 in payments and to report any back up withholding regardless of the amount of payment made to the recipient. Amounts paid for wages, salaries, travel allowances, and other compensation paid to an employee are NOT reported on a 1099. These amounts are reported on a W2.

Reminder! Nonresident aliens for tax purposes should not receive a 1099 to report income.

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